Starting a Small Business – Part 4 – Invoicing, Payments, Banking

What am I going to do with all the money I make?


You will need to send invoices to clients. In the beginning, you will find that this will take up way more time than would seem reasonable, especially if you do each one individually.

You will probably make up an invoice using Word, then use this invoice as a template. Repeatedly copying it, deleting the info and adding new information. Total ballache. Total waste of time.

It’s a much better idea to is to find yourself some financial software for small businesses. It will save you so much time in the long run. It’s much better to set this up at the beginning and get into the habit of using it. Financial software is designed to do one job and it usually does it well.

I used the copy and paste method for 10 years. I will never get these years back. I didn’t use financial software because changing my well-oiled system seemed like a total pain compared to just carrying on as normal. I was wrong.

Financial software allows you to manage clients, create products and services, create invoices, send invoices, send reminders, take payments etc.

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Which Invoicing Software?

Finding the right software can be daunting because there are so many options, so many different features, integrations & pricing models.

Sage accountancy software seems like the market leader, you have to pay for it, and as your business grows, you will pay more. It does all you need and can even calculate your VAT. This is fine, it’s easy to pay for convenience, but if your budget is tight, there may be a cheaper/free option?

I use Wave Financial. I found it easy to set up and use. I use it every day. It’s free to try, free to use, no limits, perfect for me.

I created an account, added my business information, my payment terms etc. Then I created a list of my services with their associated costs. Lastly, I added my clients’ details, one by one, as I needed to create an invoice.

Then all you need to do to create a new invoice for the client is to choose the client and add their products or services and press send. Job done.

You can choose how long your payment terms are, to send reminders as the payment deadline approaches, there are lots of options. If the invoice repeats you can also set a reoccurring schedule so you never need to worry about sending the next annual invoice.

At the bottom of every invoice, you show your payment terms, bank details etc. which is there to save people asking you for your bank details. Sadly a few people still email me for the info, which seems odd, but there you go!


You don’t need help working out how to take cash payments. Bacs is just a simple case of supplying your bank account info to the client and getting them to pay.

Online Payments, Card Readers, PayPal etc.

Accepting money via PayPal is simple, either create an invoice in PayPal or just supply your email address with your invoice. PayPal will take the money, process it for you, take some fees and voila, you have money.

Card Readers are only really practical if the client is in front of you. There are loads of new companies in the market. They offer cheap card readers which have really lowered the bar, allowing small businesses to accept payments this way. The only issue you need to consider is the cost of the terminal vs the cost of the ongoing fees for every payment. It’s the same principle as the cost of printer vs the ongoing cost of the printer ink.

Online Payments can be achieved in a number of ways. I could build an online shop to sell your services. You would then take the money via PayPal or another merchant. Or if you are using financial software then many of these integrate with your invoices. This is extremely convenient. The company I use (Wave) lets me add online payments with my invoices. Wave takes the money, processes the payment, takes some fees, just like PayPal, and voila, you have money.


Business banking is essential. It keeps your business money away from your money. It’s also more professional to accept a cheque made payable to your business name rather than your actual name.

Usually, the big banks charge fees to manage your business bank account and a fee for some transactions. This may seem odd because in the UK we expect free banking, but their justification is that they offer additional services. Fair enough

If you are looking for an account that costs less, then there are a few free business bank accounts out there. They all seem to charge small fees for a few services, so it’s your job to work out which of these is the right one for you, based upon your banking needs.

Click here to see more info and a list of these new free business banks:

Click here to see Part 5 – Computer Software and Apps

Photo by Micheile Henderson on Unsplash

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